Internal control

This description of internal control and risk management delivered by Nilörngruppen’s board and have been prepared in accordance with Swedish Corporate Governance Code and is thus limited to internal control over financial reporting. Nilörngruppen’s internal control structure is based on the COSO model (Committee of Sponsoring Organizations of the Treadway Commission) and the assessments made in the areas of control environment, risk assessment, control activities, information and communication, and monitoring.

 

Control environment

The objective of internal control is to create a clear accountability structure and effective decision-making. The Board has established a number of fundamental documents of significance for financial reporting to ensure an effective control environment. In the Board’s rules and instructions for the CEO establishes the roles and responsibilities, aimed at effective management of business risks. There are also a number of basic guidelines and policies, which are important for internal control. The basic policy documents are continually under review. Management regularly reports to the Board according to established routines. Management is responsible for the system of internal controls required to manage significant risks in ongoing operations. Managers at various levels within the Group has defined powers and responsibilities regarding internal control.

 

Control activities

The Group’s corporate staff is responsible for implementing, enhancing and maintaining the Group’s control routines and to implement internal critical business issues. Nilörngruppen’s controller function is responsible for the financial reporting from each unit is accurate, complete and timely. Nilorn has introduced a control system to verify the various processes and ensure financial reporting. The controls for the various processes and risk elements are assessed through self-assessment, internal audit, internal meetings and via the company’s external auditors. Several processes are fully or partially centralized, such as design, purchasing, logistics, finance, IT and corporate assemblies. The Board receives regular financial reports at each Board meeting, the Group and the various companies’ financial situation.

 

Internal control

To safeguard the internal controls there are both automated controls such as IT-based systems that manage authorization rights, and manual controls in the form of reconciliations and audits. Detailed analyzes of financial results and follow up plans and forecasts supplement the controls and provide overall confirmation of the quality of reporting.

The Group performs regular reviews of the companies’ routines and accounting, which rap ported to management. No Managing director get themselves to appoint or remove a financial manager and financial managers reporting directly to the Chief Financial Officer for the Group. The Group’s risks regarding financial reporting lies in the risk that material misstatements may occur in the accounts of the company’s financial position and results. The company’s accounting instructions and manuals and established monitoring procedures designed to minimize these risks.

 

The audit work

The Group applies International Financial Reporting Standards, International Financial Reporting Standards (IFRS) in the preparation of consolidated reporting. The Group’s nine-month report is reviewed by the auditor. The review follows the recommendation issued by FAR SRS. The audit of the annual accounts, the consolidated accounts and the Board of Directors and the Managing Director are performed according to generally accepted auditing standards in Sweden.

 

Information and communication

Nilörngruppen’s essential and governing documentation in the form of policies, guidelines and manuals relating to financial reporting, communicated mainly via the intranet and the Group’s financial manual. For communication with internal and external parties there is a communication and IR policy with guidelines for how this should be done. The aim of the policy is to ensure that all information obligations are fulfilled in a correct and complete manner.

 

Monitoring

Nilörngruppen’s business units are integrated through common business and corporate reporting and common reporting instructions. The Group’s central finance function has also a close relation with the subsidiaries’ controllers in financial accounting and reporting. Nilorn has no separate internal audit function. However, Nilorn has a defined process for evaluating and monitoring the internal control. The form of follow-up decided by the Board also annually assesses the need for a separate internal audit function.

 

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